01a0340p.06

8QLWHG6WDWHVY%DVV 1R
86 WKHUH KDG EHHQ D GHQLDO RI HTXDO
SURWHFWLRQRIWKHODZV+XQWHU86DW
7KH GHIHQGDQW LQ $UPVWURQJ DUJXHG WKDW +XQWHU ³FXW
DJDLQVWDQ\DEVROXWHUHTXLUHPHQWWKDWWKHUHEHDVKRZLQJRI
IDLOXUH WR SURVHFXWH VLPLODUO\ VLWXDWHG LQGLYLGXDOV´
$UPVWURQJ86DW7KH$UPVWURQJFRXUWUHMHFWHG
WKLVDUJXPHQWQRWLQJWKDWWKHSHUVRQVDGYHUVHO\DIIHFWHGE\
*HRUJLD¶V FRQVWLWXWLRQDO SURYLVLRQ ZHUH DOO ³VLPLODUO\
VLWXDWHG´WKHKROGLQJLQ+XQWHUZDVWKXV³FRQVLVWHQWZLWK
RUGLQDU\HTXDOSURWHFWLRQSULQFLSOHVLQFOXGLQJWKHVLPLODUO\
VLWXDWHGUHTXLUHPHQW´,G
7KH UHDVRQ WKDW WKH PHPEHUV RI WKH SRRO RI SHRSOH
GLVHQIUDQFKLVHGE\WKH*HRUJLDFRQVWLWXWLRQDOSURYLVLRQZHUH
³VLPLODUO\VLWXDWHG´,WDNHLWZDVWKDWDOORIWKHP±EODFNDQG
ZKLWH±KDGEHHQFRQYLFWHGRIFULPHVRIPRUDOWXUSLWXGH,Q
WKH FDVH EHIRUH XV KHUH E\ FRQWUDVW WKHUH LV VLPSO\ QR
HYLGHQFHRIDQ\ZKLWHSHUVRQEHLQJLQDVLWXDWLRQFRPSDUDEOH
WR%DVV¶DQGQRWEHLQJSURVHFXWHG
0RUHLPSRUWDQWO\SHUKDSVWKHUHLVQRHYLGHQFHKHUHRID
UDFLDOO\GLVFULPLQDWRU\PRWLYHFRUUHVSRQGLQJWRWKHLPSURSHU
PRWLYHVRIZKLFKWKHUHZDVGLUHFWHYLGHQFHLQERWK+XQWHU
DQG-RQHV7KHIDFWWKDWWRS-XVWLFH'HSDUWPHQWRIILFLDOVKDYH
H[SUHVVHGFRQFHUQRYHUVRPHRIWKHQDWLRQDOVWDWLVWLFVGRHV
QRWLQP\YLHZFRQVWLWXWH³HYLGHQFH´WKDWFDSLWDOHOLJLEOH
FKDUJHVZHUHEURXJKWDJDLQVW%DVVEHFDXVHRIKLVUDFHDQGQRW
VLPSO\EHFDXVHWKHUHLVSUREDEOHFDXVHWREHOLHYHWKDWKHLV
UHVSRQVLEOHIRUDVHULHVRIPXUGHUVFRPPLWWHGWRSURWHFWKLV
GUXJEXVLQHVV
,QP\YLHZWKHGLVWULFWFRXUW¶VGHFLVLRQWRJUDQWGLVFRYHU\
ZDVXQZDUUDQWHGDVDPDWWHURIODZDQGWKHGLVPLVVDORIWKH
GHDWKSHQDOW\QRWLFHZDVWKXVDQDEXVHRIGLVFUHWLRQ,QVRIDU
DVWKHFRXUWKROGVRWKHUZLVH,UHVSHFWIXOO\GLVVHQW
7KH +RQRUDEOH :DOWHU +HUEHUW 5LFH &KLHI 8QLWHG 6WDWHV 'LVWULFW
-XGJH IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
81,7(' 67$7(6 2) $0(5,&$
3ODLQWLII$SSHOODQW
Y
-2+1 %$66
'HIHQGDQW$SSHOOHH
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
1R²$UWKXU-7DUQRZ'LVWULFW-XGJH
$UJXHG-XQH
'HFLGHGDQG)LOHG6HSWHPEHU
%HIRUH0$57,1&KLHI-XGJH1(/621&LUFXLW-XGJH
5,&(&KLHI'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' .DWKOHHQ 0RUR 1HVL $66,67$17 81,7('
67$7(6 $77251(< 'HWURLW 0LFKLJDQ IRU $SSHOODQW
6DPXHO5*URVV&2/80%,$81,9(56,7<6&+22/2)

-- 1 of 8 --

8QLWHG6WDWHVY%DVV 1R
/$:1HZ<RUN1HZ<RUNIRU$SSHOOHH21%5,()
.DWKOHHQ 0RUR 1HVL $66,67$17 81,7(' 67$7(6
$77251(<'HWURLW0LFKLJDQIRU$SSHOODQW6DPXHO5
*URVV &2/80%,$ 81,9(56,7< 6&+22/ 2) /$:
1HZ<RUN1HZ<RUN:LOOLDP%'DQLHO'HWURLW0LFKLJDQ
$QGUHD'/\RQ'(3$8/81,9(56,7<&2//(*(2)
/$: &KLFDJR,OOLQRLVIRU$SSHOOHH0LULDP6*RKDUD
'HERUDK )LQV 1$$&3 /(*$/ '()(16(
('8&$7,21$/)81'1HZ<RUN1HZ<RUNIRU$PLFXV
&XULDH
0$57,1 & - GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ
ZKLFK 5,&( ' - MRLQHG 1(/621 - SS
GHOLYHUHGDVHSDUDWHRSLQLRQFRQFXUULQJLQSDUWDQGGLVVHQWLQJ
LQSDUW
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
%2<&()0$57,1-5&KLHI-XGJH2Q'HFHPEHU
D IHGHUDO JUDQG MXU\ UHWXUQHG D VHFRQG VXSHUVHGLQJ
LQGLFWPHQWFKDUJLQJGHIHQGDQW-RKQ%DVVZLWKWKHLQWHQWLRQDO
ILUHDUP NLOOLQJ RI WZR LQGLYLGXDOV 6KRUWO\ WKHUHDIWHU WKH
8QLWHG 6WDWHV ILOHG LWV QRWLFH RI LQWHQW WR VHHN WKH GHDWK
SHQDOW\RQWKRVHFKDUJHV%DVVPRYHGWRGLVPLVVWKHGHDWK
SHQDOW\ QRWLFH DQG LQ WKH DOWHUQDWLYH UHTXHVWHG GLVFRYHU\
SHUWDLQLQJWRWKH8QLWHG6WDWHV¶VFDSLWDOFKDUJLQJSUDFWLFHV
7KHGLVWULFWFRXUWJUDQWHG%DVV¶VGLVFRYHU\UHTXHVWDQGDIWHU
WKH8QLWHG6WDWHVUHIXVHGWRFRPSO\ZLWKWKHRUGHUGLVPLVVHG
WKHGHDWKSHQDOW\QRWLFH:HQRZDIILUPWKHGLVWULFWFRXUW¶V
GLVFRYHU\ RUGHU DQG UHPDQG WR DOORZ WKH 8QLWHG 6WDWHV WR
VXEPLWWKHUHTXHVWHGPDWHULDOVIRUDQLQFDPHUDUHYLHZ
,
$FFRUGLQJWRD'HSDUWPHQWRI-XVWLFHUHSRUW³7KH)HGHUDO
'HDWK3HQDOW\6\VWHP$6WDWLVWLFDO6XUYH\´ 6HSWHPEHU
DOOGHDWKHOLJLEOHFKDUJHVEURXJKWE\WKH8QLWHG6WDWHV
VLQFHDUHVXEMHFWHGWRWKH'HSDUWPHQW¶VGHDWKSHQDOW\
1R 8QLWHG6WDWHVY%DVV
Y8QLWHG6WDWHV86 7KHVWDQGDUGDV
WKH$UPVWURQJFRXUWREVHUYHG³LVDGHPDQGLQJRQH´,GDW

7RREWDLQWKHGLVFRYHU\KHVRXJKWKHUH%DVVZDVUHTXLUHG
WRSURGXFH³VRPHHYLGHQFH´LQVXSSRUWRIERWKHOHPHQWVRI
KLVVHOHFWLYHSURVHFXWLRQGHIHQVH6HH8QLWHG6WDWHVY-RQHV
)G WK&LU 7KLVVWDQGDUGLVLWVHOID
³ULJRURXV´RQHVHH$UPVWURQJ86DWDQGLQP\
MXGJPHQW%DVVIDLOHGWRPHHWLW
6WDWLVWLFDOO\ LW LV WUXH WKDW PRVW RI WKH FDSLWDOHOLJLEOH
SURVHFXWLRQVLQWKH(DVWHUQ'LVWULFWRI0LFKLJDQKDYHEHHQ
EURXJKWDJDLQVW$IULFDQ$PHULFDQV,WLVGLIILFXOWIRUPHWR
VHH KRZ WKLV GDWXP FRQVWLWXWHV HYHQ ³VRPH´ HYLGHQFH RI
GLVFULPLQDWRU\HIIHFWKRZHYHUJLYHQZKDW,WDNHWREHWKH
FRPSOHWHDEVHQFHRIDQ\HYLGHQFHWKDWWKH86$WWRUQH\¶V
2IILFHIDLOHGWRLQLWLDWHFDSLWDOHOLJLEOHSURVHFXWLRQVDJDLQVW
LQGLYLGXDOVZKRVHVLWXDWLRQVZHUHVLPLODUWRWKDWRI0U%DVV
EXWZKRVHUDFHZDVGLIIHUHQW³7RHVWDEOLVKDGLVFULPLQDWRU\
HIIHFWLQDUDFHFDVH´$UPVWURQJFRQILUPV³WKHFODLPDQWPXVW
VKRZ WKDW VLPLODUO\ VLWXDWHG LQGLYLGXDOV RI D GLIIHUHQW UDFH
ZHUHQRWSURVHFXWHG´,GDW$QGWRREWDLQGLVFRYHU\LQ
WKLV FRQQHFWLRQ WKHUH PXVW EH D ³FUHGLEOH VKRZLQJ RI
GLIIHUHQWWUHDWPHQWRIVLPLODUO\VLWXDWHGSHUVRQV´,GDW
+XQWHU Y 8QGHUZRRG 86 ZKLFK ZDV
GLVWLQJXLVKHGLQ$UPVWURQJDQGRQZKLFKP\FROOHDJXHVRQ
WKHSDQHOUHO\KHDYLO\KHUHZDVDFDVHLQZKLFKWKH6WDWHRI
*HRUJLD KDG DGRSWHG D FRQVWLWXWLRQDO SURYLVLRQ
GLVHQIUDQFKLVLQJSHUVRQVFRQYLFWHGRIFULPHVLQYROYLQJPRUDO
WXUSLWXGH7KHUHZDVGLUHFWHYLGHQFHWKDWWKHVWDWH¶VSXUSRVH
KDGEHHQWRGHQ\WKHYRWHWREODFNV6HH+XQWHU86DW
$UPVWURQJ86DW7KHSURYLVLRQKDGD
UDFLDOO\GLVSDUDWHLPSDFWLQSUDFWLFHGLVHQIUDQFKLVLQJEODFNV
DWOHDVWWLPHVDVRIWHQDVZKLWHV±DQGLQWKLVFRQWH[WWKH
+XQWHUFRXUWFRQFOXGHGWKDWXQGHUWKHDQDO\VLVRI$UOLQJWRQ
+HLJKWV Y 0HWURSROLWDQ +RXVLQJ 'HYHORSPHQW &RUS
86 DQG0W+HDOWK\&LW\%UGRI(GXFY'R\OH

-- 2 of 8 --

8QLWHG6WDWHVY%DVV 1R
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
&21&855,1*,13$57',66(17,1*,13$57
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
'$9,'$1(/621&LUFXLW-XGJHFRQFXUULQJLQSDUWDQG
GLVVHQWLQJLQSDUW,FRQFXUJHQHUDOO\LQ3DUWV,DQG,,RIWKH
FRXUW¶VRSLQLRQDVZHOODVLQWKHILUVWSDUDJUDSKRI3DUW,9
EXW,ZRXOGUHYHUVHWKHGLVPLVVDORIWKHGHDWKSHQDOW\QRWLFH
RQ WKH JURXQG WKDW GHIHQGDQW %DVV IDLOHG WR PDNH WKH
WKUHVKROG VKRZLQJ QHFHVVDU\ IRU LVVXDQFH RI WKH GLVFRYHU\
RUGHUKHVRXJKW
$V%DVVDFNQRZOHGJHVLQKLVEULHIWKHUDFLDOGLVSDULWLHVRI
ZKLFK KH FRPSODLQV ³DUH JHQHUDWHG SULPDULO\ DW WKH HDUO\
VWDJHVRIIHGHUDOFDSLWDOFDVHV >7@KHPDMRUSUREOHP
VHHPV WR RFFXU LQ WKH LQLWLDO VHOHFWLRQ RI FDVHV IRU IHGHUDO
SURVHFXWLRQRQFDSLWDOHOLJLEOHFKDUJHV´7KH'HSDUWPHQWRI
-XVWLFH 6WDWLVWLFDO 6XUYH\ RQ ZKLFK %DVV UHOLHV UHIXWHV DQ\
LQIHUHQFHWKDWWKH$WWRUQH\*HQHUDO±ZKRLVQRWUHTXLUHGE\
'HSDUWPHQWRI-XVWLFHSURFHGXUHVSHUVRQDOO\WRDXWKRUL]HWKH
EULQJLQJRIFDSLWDOHOLJLEOHFDVHV±KDVEHHQJXLOW\RIUDFLDO
GLVFULPLQDWLRQDJDLQVW$IULFDQ$PHULFDQV7KHVXUYH\VKRZV
WKDW$WWRUQH\*HQHUDO-DQHW5HQRSHUVRQDOO\DXWKRUL]HG86
$WWRUQH\V WR ILOH GHDWK SHQDOW\ QRWLFHV DJDLQVW D KLJKHU
SHUFHQWDJHRIZKLWHFDSLWDOHOLJLEOHGHIHQGDQWV SHUFHQW
WKDQEODFNFDSLWDOHOLJLEOHGHIHQGDQWV SHUFHQW
-XVWDV%DVVLVQRWFKDOOHQJLQJWKHSHUVRQDOERQDILGHVRI
WKH $WWRUQH\ *HQHUDO ZKR DXWKRUL]HG WKH ILOLQJ RI D GHDWK
SHQDOW\QRWLFHLQKLVFDVHDV,XQGHUVWDQGLWKHLVQRWDOOHJLQJ
WKDWWKHRIILFHRIWKH86$WWRUQH\IRUWKHGLVWULFWZKHUHKLV
FDVHLVSHQGLQJ±WKH(DVWHUQ'LVWULFWRI0LFKLJDQ±GHFOLQHG
WRQHJRWLDWHDSOHDEDUJDLQZLWKKLPEHFDXVHRIKLVUDFH$W
ERWWRPUDWKHUKLVTXDUUHOVHHPVWREHZLWKWKHGHFLVLRQRI
WKH 86 $WWRUQH\¶V 2IILFH WR EULQJ IHGHUDO GHDWKHOLJLEOH
FKDUJHVDJDLQVWKLPLQWKHILUVWSODFH$QGKHFDQQRWSUHYDLO
RQWKLVSRLQWXOWLPDWHO\ZLWKRXWGHPRQVWUDWLQJWKDWWKH86
$WWRUQH\¶VFKDUJLQJSROLF\³KDGDGLVFULPLQDWRU\HIIHFWDQG
WKDWLWZDVPRWLYDWHGE\DGLVFULPLQDWRU\SXUSRVH´8QLWHG
6WDWHVY$UPVWURQJ86 TXRWLQJ:D\WH
1R 8QLWHG6WDWHVY%DVV
GHFLVLRQPDNLQJ SURFHGXUHV 8QGHU WKH SURWRFRO WKH
LQGLYLGXDO8QLWHG6WDWHV$WWRUQH\VRIILFHVUHWDLQGLVFUHWLRQLQ
RQO\WKUHHDUHDVZKHWKHUWREULQJIHGHUDOFKDUJHVRUGHIHUWR
VWDWH SURVHFXWLRQV ZKHWKHU WR FKDUJH GHIHQGDQWV ZLWK D
FDSLWDOHOLJLEOH RIIHQVH DQG ZKHWKHU WR HQWHU LQWR D SOHD
DJUHHPHQW2WKHUZLVHWKHVROHSRZHUWRDXWKRUL]HVHHNLQJ
WKHGHDWKSHQDOW\OLHVZLWKWKH$WWRUQH\*HQHUDO2QFHWKH
$WWRUQH\*HQHUDODXWKRUL]HVVHHNLQJWKHGHDWKSHQDOW\WKH
8QLWHG6WDWHVPXVWILOHDQRWLFHRILWVLQWHQWWRGRVR6HH
86& † D (DFK WLPH WKH 8QLWHG 6WDWHV FKDUJHV D
GHIHQGDQWZLWKDGHDWKHOLJLEOHFULPHLWPXVWVXEPLWVSHFLILF
IRUPVLQFOXGLQJDUHFRPPHQGDWLRQRQZKHWKHUWRVHHNWKH
GHDWK SHQDOW\ D ³'HDWK 3HQDOW\ (YDOXDWLRQ )RUP´ DQG D
PHPRUDQGXPRXWOLQLQJWKHWKHRU\RIOLDELOLW\WKHIDFWVDQG
HYLGHQFHLQFOXGLQJDQ\HYLGHQFHUHODWLQJWRDQ\DJJUDYDWLQJ
RU PLWLJDWLQJ IDFWRUV WKH GHIHQGDQW¶V EDFNJURXQG DQG
FULPLQDOKLVWRU\WKHEDVLVIRUIHGHUDOSURVHFXWLRQDQGRWKHU
UHOHYDQWLQIRUPDWLRQ6HH86$WW\V0DQ†
%DVVUHTXHVWHGIURPWKH0LFKLJDQ8QLWHG6WDWHV$WWRUQH\¶V
RIILFH DOO VXFK PDWHULDOV UHODWLQJ WR KLV SURVHFXWLRQ DOO
SROLFLHVRUPDQXDOVXVHGLQWKH(DVWHUQ'LVWULFWRI0LFKLJDQ
WRGHWHUPLQHZKHWKHUWRFKDUJHGHIHQGDQWVIHGHUDOO\DQGDOLVW
RIDOOGHDWKHOLJLEOHGHIHQGDQWVLQWKDWGLVWULFWVLQFH-DQXDU\
LQFOXGLQJ HDFK GHIHQGDQW¶V UDFH DQG WKH XOWLPDWH
GLVSRVLWLRQRIHDFKFDVH%DVVDOVRUHTXHVWHGDOOPDWHULDOV
VXEPLWWHG WR WKH $WWRUQH\ *HQHUDO IRU GHDWKHOLJLEOH
SURVHFXWLRQVEHWZHHQ-DQXDU\DQG6HSWHPEHU
DV ZHOO DV FDSWLRQV DQG FDVH QXPEHUV RI VXFK FDVHV D
GHVFULSWLRQ RI WKH RIIHQVH FKDUJHG DQG WKH XOWLPDWH
GLVSRVLWLRQRIWKHFDVH)LQDOO\%DVVUHTXHVWHGDOOVWDQGDUGV
SROLFLHVSUDFWLFHVRUFULWHULDHPSOR\HGE\WKH'HSDUWPHQWRI
-XVWLFH WR JXDUG DJDLQVW WKH LQIOXHQFH RI UDFH LQ WKH GHDWK
SHQDOW\SURWRFRODQ\FRUUHVSRQGHQFHEHWZHHQWKH'HSDUWPHQW
RI -XVWLFH DQG WKH 8QLWHG 6WDWHV $WWRUQH\V UHJDUGLQJ VXFK
SROLFLHV RU UHTXHVWLQJ LGHQWLILFDWLRQ RI GHDWKHOLJLEOH
GHIHQGDQWV DQG D OLVW RI DOO QRQQHJOLJHQW KRPLFLGH FDVHV
WKURXJKRXWWKH8QLWHG6WDWHVVLQFH-DQXDU\LQZKLFK
RQHRUPRUHRIIHQGHUVZHUHDUUHVWHGDQGFKDUJHGDQGLQZKLFK
WKHIDFWVZRXOGKDYHUHQGHUHGWKHRIIHQGHUHOLJLEOHIRUWKH

-- 3 of 8 --

8QLWHG6WDWHVY%DVV 1R
GHDWK SHQDOW\ $V HYLGHQFH LQ VXSSRUW RI KLV GLVFRYHU\
PRWLRQ %DVV LQWURGXFHG DPRQJ RWKHU VWXGLHV WKH
'HSDUWPHQWRI-XVWLFH¶V6XUYH\%DVVDOVRLQWURGXFHGSXEOLF
FRPPHQWVUHJDUGLQJWKH6XUYH\PDGHRQWKHGD\RILWVUHOHDVH
E\ WKHQ$WWRUQH\ *HQHUDO -DQHW 5HQR DQG WKHQ'HSXW\
$WWRUQH\*HQHUDO(ULF+ROGHUDVZHOODVFRPPHQWVE\WKH
FXUUHQW$WWRUQH\*HQHUDO-RKQ$VKFURIW7KH8QLWHG6WDWHV
RSSRVHG %DVV¶V PRWLRQ RQ WKH JURXQGV WKDW WKH UHTXHVWHG
LQIRUPDWLRQ ZDV SURWHFWHG E\ ERWK WKH ZRUNSURGXFW DQG
GHOLEHUDWLYHSURFHVVSULYLOHJHVWKDW%DVVKDGIDLOHGWRPDNH
WKHHYLGHQWLDU\VKRZLQJQHFHVVDU\WRREWDLQIXUWKHUGLVFRYHU\
DQGWKDWWKHUHTXHVWHGPDWHULDOVZHUHHLWKHUQRQH[LVWHQWRU
DOUHDG\LQ%DVV¶VSRVVHVVLRQ
2Q 2FWREHU IROORZLQJ D KHDULQJ RQ %DVV¶V
PRWLRQ WKH GLVWULFW FRXUW IRXQG WKDW KH KDG SUHVHQWHG
VXIILFLHQWHYLGHQFHRIUDFLDOELDVLQWKHGHDWKSHQDOW\GHFLVLRQ
SURFHVVWRMXVWLI\IXUWKHUGLVFRYHU\7KHGLVWULFWFRXUWQRWLQJ
WKDW WKH 8QLWHG 6WDWHV GLG QRW RIIHU DQ\ RI WKH DOOHJHGO\
SULYLOHJHGPDWHULDOVIRULQFDPHUDUHYLHZIXUWKHUIRXQGWKDW
DQ\SULYLOHJHVWKDWPD\KDYHDWWDFKHGWRWKHPDWHULDOVZHUH
RXWZHLJKHG E\ WKH FRQVWLWXWLRQDO LQWHUHVWV LPSOLFDWHG E\
%DVV¶VDOOHJDWLRQVDQGWKHGHDWKSHQDOW\FRQWH[W)LQDOO\LW
FLWHG 86& † I ³6SHFLDO SUHFDXWLRQ WR HQVXUH
DJDLQVWGLVFULPLQDWLRQ´ZKLFKUHTXLUHVDMXU\WRGHWHUPLQH
WKDW LWV LQGLYLGXDO PHPEHUV ZRXOG KDYH LPSRVHG D GHDWK
VHQWHQFHUHJDUGOHVVRIWKHGHIHQGDQW¶VUDFHDVDSUHUHTXLVLWH
WR LPSRVLQJ VXFK D VHQWHQFH XQGHU 6HFWLRQ H 7KH
GLVWULFW FRXUW QRWHG WKDW IRU 6HFWLRQ I WR KDYH LWV
LQWHQGHGHIIHFWRIHQVXULQJWKDWDGHIHQGDQW¶VUDFHSOD\VQR
UROHLQKLVGHDWKVHQWHQFHGLVFRYHU\RIWKHVRUWUHTXHVWHGE\
%DVVPXVWEHDOORZHG
7KH 8QLWHG 6WDWHV UHIXVHG WR FRPSO\ ZLWK WKH GLVFRYHU\
RUGHU2Q-DQXDU\WKHGLVWULFWFRXUWVDQFWLRQHGWKH
8QLWHG6WDWHVE\GLVPLVVLQJLWVQRWLFHRILQWHQWWRVHHNWKH
GHDWKSHQDOW\7KH8QLWHG6WDWHVWLPHO\DSSHDOHG
1R 8QLWHG6WDWHVY%DVV
WKDWHDFKMXU\PHPEHUVZHDUWKDWKHRUVKHYRWHGWRLPSRVH
WKHGHDWKSHQDOW\ZLWKRXWUHJDUGWRLPSURSHUFRQVLGHUDWLRQV
LQFOXGLQJWKHGHIHQGDQW¶VUDFH-XU\PHPEHUVDUHVLPSO\QRW
UHVSRQVLEOH IRU DOVR DVVHUWLQJ WKDW WKH GHIHQGDQW ZDV QRW
SURVHFXWHGEHFDXVHRIKLVRUKHUUDFH4XHVWLRQVUHJDUGLQJ
WKHSURVHFXWLRQ¶VPRWLYDWLRQDUHPRUHSURSHUO\DGGUHVVHGLQ
WKHW\SHRIVHOFWLYHSURVHFXWLRQFODLP%DVVSUHVHQWV6HFWLRQ
I GRHV QRWKLQJ WR JUDQW KLP D ULJKW WR HLWKHU REWDLQ
GLVFRYHU\ RU SUHVHQW HYLGHQFH WR D MXU\ UHJDUGLQJ DOOHJHG
GLVFULPLQDWLRQ LQ WKH SURVHFXWLRQ DQG WKH GLVWULFW FRXUW
DEXVHG LWV GLVFUHWLRQ LQ KROGLQJ RWKHUZLVH 1RQHWKHOHVV
EHFDXVHZHDIILUPWKHGLVWULFWFRXUW¶VGLVFRYHU\RUGHURQRWKHU
JURXQGVRXUGHFLVLRQWRUHYHUVHWKHGLVWULFWFRXUWRQWKLVLVVXH
GRHVQRWHIIHFWWKHRXWFRPHRIWKLVDSSHDO
6HFRQGWKH8QLWHG6WDWHVDUJXHVWKDWWKHUHTXHVWHGLWHPV
DUH HLWKHU QRW UHOHYDQW QRQH[LVWHQW RU DOUHDG\ LQ %DVV¶V
SRVVHVVLRQ7KHGLVWULFWFRXUWLQGLFDWHGWKDWLWZRXOGKHDU
IURPWKH8QLWHG6WDWHVDVWRWKHXQDYDLODELOLW\RULUUHOHYDQF\
RISDUWLFXODUGRFXPHQWVEXWWKH8QLWHG6WDWHVFKRVHLQVWHDG
WRUHIXVHWRFRPSO\ZLWKWKHHQWLUHRUGHU7KDWUHIXVDODOVR
SURKLELWHG WKH GLVWULFW FRXUW IURP UHYLHZLQJ WKH UHTXHVWHG
GRFXPHQWVWRGHWHUPLQHZKHWKHUWKH8QLWHG6WDWHV¶FODLPHG
SULYLOHJHV DSSOLHG WR DQ\ RI WKHP 7KHUHIRUH ZH ILQG WKH
UHFRUG LQVXIILFLHQWO\ GHYHORSHG WR DOORZ XV WR DVVHVV WKH
PHULWVRIWKH8QLWHG6WDWHV¶VDUJXPHQWVUHODWLQJWRWKHFRQWHQW
RIWKHUHTXHVWHGGRFXPHQWV%HFDXVHRIWKLVDQGEHFDXVHZH
WKLQNWKHGLVWULFWFRXUWVKRXOGKDYHWKHRSSRUWXQLW\WRUHYLHZ
HDFKUHTXHVWHGLWHP¶VUHOHYDQF\DQGSULYLOHJHGVWDWXVLQWKH
ILUVWLQVWDQFHZHUHPDQGWRWKHGLVWULFWFRXUWZLWKLQVWUXFWLRQV
WRDOORZWKH8QLWHG6WDWHVWRSURGXFHWKHGRFXPHQWVIRUDQLQ
FDPHUDUHYLHZ,IWKH8QLWHG6WDWHVDJDLQIDLOVWRFRPSO\WKH
GLVWULFW FRXUW UHPDLQV IUHH WR LPSRVH ZKDWHYHU VDQFWLRQ LW
GHHPVDSSURSULDWHXQGHUWKHFLUFXPVWDQFHV
9
)RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUW¶V
GLVFRYHU\ RUGHU DQG 5(0$1' IRU IXUWKHU SURFHHGLQJV
FRQVLVWHQWZLWKWKLVRSLQLRQ

-- 4 of 8 --

8QLWHG6WDWHVY%DVV 1R
VWDWLVWLFVVKRZLQJWKDWWKHJUDYHUDFLDOGLVSDULWLHVLGHQWLILHGE\
WKH6XUYH\DUHXQLTXHWRWKHGHDWKSHQDOW\SURWRFRO
7KH8QLWHG6WDWHVDWWHPSWVWRSUHFOXGHXVIURPGUDZLQJDQ\
LQIHUHQFH RI LQWHQWLRQDO UDFH GLVFULPLQDWLRQ IURP %DVV¶V
VWDWLVWLFVE\DUJXLQJWKDW0F&OHVNH\Y.HPS86
SURKLELWV VXFK LQIHUHQFHV 0F&OHVNH\ KHOG WKDW
VWDWLVWLFVVKRZLQJWKHGLVFULPLQDWRU\HIIHFWRIDVWDWH¶VGHDWK
SHQDOW\SURFHGXUHGRQRWZLWKRXWPRUHFRQVWLWXWHSURRIRID
GLVFULPLQDWRU\ LQWHQW 6HH LG DW ,Q 0F&OHVNH\
KRZHYHUWKH6XSUHPH&RXUWVLWWLQJLQIHGHUDOKDEHDVUHYLHZ
ZDVDGGUHVVLQJZKHWKHUWKHGHIHQGDQWKDGFDUULHGKLVEXUGHQ
RISURRIRQWKHPHULWVRIKLVVHOHFWLYHSURVHFXWLRQFODLP,Q
FRQWUDVWZHPXVWGHWHUPLQHRQO\ZKHWKHU%DVVKDVVKRZQ
³VRPH HYLGHQFH WHQGLQJ WR VKRZ WKH H[LVWHQFH RI
GLVFULPLQDWRU\LQWHQW´VXIILFLHQWWRZDUUDQWGLVFRYHU\-RQHV
)GDW ³2EYLRXVO\DGHIHQGDQWQHHGQRWSURYHKLV
FDVHLQRUGHUWRMXVWLI\GLVFRYHU\RQDQLVVXH´ 0F&OHVNH\
ZLOOFHUWDLQO\SUHFOXGH%DVV¶VVHOHFWLYHSURVHFXWLRQFODLPLI
DW WKH HQG RI GLVFRYHU\ KH IDLOV WR VKRZ DQ\ DGGLWLRQDO
HYLGHQFH WKDW WKH 8QLWHG 6WDWHV LQWHQWLRQDOO\ GLVFULPLQDWHV
DJDLQVWEODFNVWKURXJKWKHGHDWKSHQDOW\SURWRFRO,WGRHVQRW
KRZHYHUSRVHDQ\EDUWR%DVVDWWKLVSUHOLPLQDU\VWDJH+HUH
DVZHOOWKH8QLWHG6WDWHVKDVIDLOHGWRVKRZWKDWWKHGLVWULFW
FRXUW DEXVHG LWV GLVFUHWLRQ LQ RUGHULQJ GLVFRYHU\ RQ WKH
JURXQGV WKDW WKH VWDUN GLVFULPLQDWRU\ HIIHFW RI WKH IHGHUDO
GHDWK SHQDOW\ SURWRFRO FRXSOHG ZLWK WKH 'HSDUWPHQW RI
-XVWLFH¶V RIILFLDO VWDWHPHQWV UHFRJQL]LQJ WKH SRVVLELOLW\ RI
LQWHQWLRQDO GLVFULPLQDWLRQ LQ OLJKW RI WKH SURWRFRO¶V
GLVFULPLQDWRU\HIIHFWSUHVHQWVVRPHHYLGHQFHWHQGLQJWRVKRZ
WKDWUDFHLQIDFWSOD\VDUROHLQWKH8QLWHG6WDWHV¶VGHFLVLRQ
PDNLQJSURFHVV
,9
:H FDQ GLVSRVH RI ERWK SDUWLHV¶ UHPDLQLQJ DUJXPHQWV
UHODWLYHO\HDVLO\7KH8QLWHG6WDWHVDUJXHVWKDWWKHGLVWULFW
FRXUWDEXVHGLWVGLVFUHWLRQE\FLWLQJ86&† I DVDQ
DOWHUQDWLYHJURXQGIRULWVGLVFRYHU\RUGHU7KH8QLWHG6WDWHV
LVFRUUHFW7KDWVWDWXWHE\LWVSODLQODQJXDJHUHTXLUHVRQO\
1R 8QLWHG6WDWHVY%DVV
,,
$VDQLQLWLDOPDWWHUZHDJUHHZLWKWKH8QLWHG6WDWHVWKDWZH
KDYH MXULVGLFWLRQ WR UHYLHZ WKH GLVWULFW FRXUW¶V SUHWULDO
GLVFRYHU\RUGHUEHFDXVHWKDWFRXUW¶VGLVPLVVDORIWKHGHDWK
SHQDOW\QRWLFHFRQVWLWXWHVDILQDODSSHDODEOHRUGHUXQGHU
86&†8QGHU6HFWLRQ³DQDSSHDOE\WKH8QLWHG
6WDWHV VKDOO OLH WR D FRXUW RI DSSHDOV IURP D GHFLVLRQ
MXGJPHQWRURUGHURIDGLVWULFWFRXUWGLVPLVVLQJDQLQGLFWPHQW
RULQIRUPDWLRQ´:HKDYHSUHYLRXVO\DOORZHGWKH8QLWHG
6WDWHV WR DSSHDO XQGHU 6HFWLRQ SUHWULDO GLVFRYHU\
UXOLQJV6HHHJ8QLWHG6WDWHVY3UHVVHU)G
WK&LU ,Q3UHVVHUZHH[HUFLVHGMXULVGLFWLRQ
RYHU WKH 8QLWHG 6WDWHV¶V DSSHDO IURP DQ RUGHU JUDQWLQJ D
GHIHQGDQW¶V GLVFRYHU\ UHTXHVW EHFDXVH WKH GLVWULFW FRXUW
LQGLFDWHGWKDWLIWKH8QLWHG6WDWHVIDLOHGWRFRPSO\LWZRXOG
VXSSUHVVWKHUHOHYDQWHYLGHQFHZKLFKZRXOGOLNHO\UHVXOWLQ
GLVPLVVDORIWKHLQGLFWPHQW+HUHWKH8QLWHG6WDWHV¶VIDLOXUH
WRFRPSO\ZLWKWKHGLVWULFWFRXUW¶VGLVFRYHU\RUGHUUHVXOWHGLQ
GLVPLVVDO RI WKH GHDWK SHQDOW\ QRWLFH ± LQ HIIHFW D SDUWLDO
GLVPLVVDO RI WKH FKDUJH $FFRUGLQJO\ ZH ILQG WKDW DV LQ
3UHVVHU ZH KDYH MXULVGLFWLRQ WR KHDU WKH 8QLWHG 6WDWHV¶V
DSSHDOIURPWKHGLVWULFWFRXUW¶VSUHWULDOGLVFRYHU\RUGHUDQG
ZLOOQRZSURFHHGWRWKHPHULWVRILWVDUJXPHQW
,,,
³,WLVZHOOHVWDEOLVKHGWKDWWKHVFRSHRIGLVFRYHU\LVZLWKLQ
WKHVRXQGGLVFUHWLRQRIWKHWULDOFRXUW´8QLWHG6WDWHVY2QH
7UDFW RI 5HDO 3URSHUW\ )G WK &LU
FLWDWLRQVDQGLQWHUQDOSXQFWXDWLRQRPLWWHG :HWKXVUHYLHZ
D GLVWULFW FRXUW¶V GLVFRYHU\ RUGHU LQ D FULPLQDO FDVH IRU DQ
DEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHVY.LQFDLGH)G
WK&LU 8QGHUWKLVVWDQGDUG³WKHUHOHYDQW
LQTXLU\LVQRWKRZWKHUHYLHZLQJMXGJHVZRXOGKDYHUXOHGLI
WKH\ KDG EHHQ FRQVLGHULQJ WKH FDVH LQ WKH ILUVW SODFH EXW
UDWKHUZKHWKHUDQ\UHDVRQDEOHSHUVRQFRXOGDJUHHZLWKWKH
GLVWULFWFRXUW´0RUDOHVY$PHULFDQ+RQGD0RWRU&R,QF
)G WK&LU

-- 5 of 8 --

8QLWHG6WDWHVY%DVV 1R
7KH8QLWHG6WDWHVDUJXHVWKDW%DVV¶VHYLGHQFHLQVXSSRUWRI
KLVGLVFRYHU\UHTXHVWLQFOXGLQJWKH'HSDUWPHQWRI-XVWLFH¶V
6XUYH\ DQG WKH 'HSDUWPHQW RIILFLDOV¶ VWDWHPHQWV GLG QRW
FRQVWLWXWH VXIILFLHQW HYLGHQFH RI VHOHFWLYH SURVHFXWLRQ WR
ZDUUDQWGLVFRYHU\$FFRUGLQJO\LWFRQWHQGVWKDWWKHGLVWULFW
FRXUWDEXVHGLWVGLVFUHWLRQLQRUGHULQJWKH8QLWHG6WDWHVWR
SURGXFHWKHUHOHYDQWGRFXPHQWV%DVVGRHVQRWGLVSXWHWKDW
WKHHYLGHQFHKHSUHVHQWHGWRWKHGLVWULFWFRXUWZDVLQVXIILFLHQW
WRFRQVWLWXWHDSULPDIDFLHFDVHRIVHOHFWLYHSURVHFXWLRQ+H
GRHV KRZHYHU DUJXH WKDW WKH HYLGHQFH ZDV VXIILFLHQW WR
ZDUUDQWIXUWKHULQYHVWLJDWLRQWKURXJKGLVFRYHU\
7RPDNHRXWDFODLPRIVHOHFWLYHSURVHFXWLRQDGHIHQGDQW
PXVWVKRZERWKDGLVFULPLQDWRU\HIIHFWDQGDGLVFULPLQDWRU\
SXUSRVHRULQWHQW6HH8QLWHG6WDWHVY$UPVWURQJ86
,Q$UPVWURQJWKH6XSUHPH&RXUWGLVFXVVHG
WKH WKUHVKROG VKRZLQJ D FULPLQDO GHIHQGDQW PXVW PDNH LQ
RUGHUWRREWDLQGLVFRYHU\RQDVHOHFWLYHSURVHFXWLRQFODLP
6HHLGDW7KH6XSUHPH&RXUWQRWHGWKDW³LQWKHDEVHQFH
RI FOHDU HYLGHQFH WR WKH FRQWUDU\ FRXUWV SUHVXPH WKDW
>SURVHFXWRUV@KDYHSURSHUO\GLVFKDUJHGWKHLURIILFLDOGXWLHV´
$UPVWURQJ 86 DW FLWDWLRQV RPLWWHG
$FFRUGLQJO\³WKHVKRZLQJQHFHVVDU\WRREWDLQGLVFRYHU\>LQ
D VHOHFWLYH SURVHFXWLRQ FDVH@ VKRXOG LWVHOI EH D VLJQLILFDQW
EDUULHU WR WKH OLWLJDWLRQ RI LQVXEVWDQWLDO FODLPV´ ,G
$UPVWURQJ¶V SODLQ ODQJXDJH UHTXLUHV RQO\ WKDW D GHIHQGDQW
PXVWSUHVHQW³VRPHHYLGHQFHWHQGLQJWRVKRZWKHH[LVWHQFHRI
WKHGLVFULPLQDWRU\HIIHFWHOHPHQW´,GDW FLWDWLRQVDQG
LQWHUQDOSXQFWXDWLRQVRPLWWHG 1RQHWKHOHVVZHKDYHUHDG
$UPVWURQJ WR UHTXLUH VRPH HYLGHQFH RI WKH GLVFULPLQDWRU\
LQWHQWHOHPHQWDVZHOO6HH8QLWHG6WDWHVY-RQHV)G
WK&LU 7RHVWDEOLVKGLVFULPLQDWRU\HIIHFW
DGHIHQGDQW³PXVWVKRZWKDWVLPLODUO\VLWXDWHGLQGLYLGXDOVRI
DGLIIHUHQWUDFHZHUHQRWSURVHFXWHG´$UPVWURQJ86
DW $V DQ H[DPSOH RI ³VRPH HYLGHQFH´ VKRZLQJ D
³GLVFULPLQDWRU\ HIIHFW RQ EODFNV DV FRPSDUHG WR VLPLODUO\
VLWXDWHG ZKLWHV´ $UPVWURQJ FLWHG D VWDWLVWLF VKRZLQJ WKDW
EODFNVZHUH³DWOHDVWWLPHVDVOLNHO\DVZKLWHV´WRKDYHD
VWDWH¶VGLVHQIUDQFKLVHPHQWODZDSSOLHGWRWKHP,GDW
FLWLQJ +XQWHU Y 8QGHUZRRG 86 7R
1R 8QLWHG6WDWHVY%DVV
GLVFULPLQDWRU\HIIHFWRQVLPLODUO\VLWXDWHGZKLWHVDQGEODFNV
LVVLPSO\ZURQJ
2I FRXUVH QRQGLVFULPLQDWRU\ UHDVRQV PD\ H[SODLQ VXFK
JODULQJGLVFUHSDQFLHVEXW%DVVQHHGQRWDGGUHVVDQ\RIWKHP
DWWKLVSUHGLVFRYHU\VWDJH7KHFXUUHQWGHDWKSHQDOW\SURWRFRO
OHDYHVRQO\WKUHHDUHDVZKHUHWKH8QLWHG6WDWHV$WWRUQH\VFDQ
H[HUFLVHGLVFUHWLRQ DQGRIFRXUVHLWLVWKHPDQQHULQZKLFK
WKDW GLVFUHWLRQ LV H[HUFLVHG WKDW IRUPV WKH EDVLV RI %DVV¶V
FODLP EULQJLQJ IHGHUDO FKDUJHV EULQJLQJ GHDWKHOLJLEOH
FKDUJHVDQGSOHDEDUJDLQLQJ,QWKHWZRDUHDVDGGUHVVHGE\
WKH 6XUYH\ ± EULQJLQJ GHDWKHOLJLEOH FKDUJHV DQG SOHD
EDUJDLQLQJ ± WKH UDFLDO GLVSDULWLHV DUH FOHDU 9LHZLQJ WKH
WRWDOLW\RI%DVV¶VHYLGHQFHWKHGLVWULFWFRXUWGLGQRWDEXVHLWV
GLVFUHWLRQLQILQGLQJWKDWWKHVWDWLVWLFDOGLVSDULWLHVDUHDWWKH
OHDVW VRPH HYLGHQFH WHQGLQJ WR VKRZ WKH GHDWK SHQDOW\
SURWRFRO¶VGLVFULPLQDWRU\HIIHFWZDUUDQWLQJGLVFRYHU\
&'LVFULPLQDWRU\,QWHQW
:LWKUHJDUGWRWKHGLVFULPLQDWRU\LQWHQWHOHPHQWZHDJDLQ
ILQGWKDW%DVVSUHVHQWHGVRPHHYLGHQFHWHQGLQJWRVKRZWKDW
WKH 8QLWHG 6WDWHV FRQVLGHUV WKH GHIHQGDQW¶V UDFH ZKHQ
GHWHUPLQLQJ ZKHWKHU WR FKDUJH KLP RU KHU ZLWK D GHDWK
HOLJLEOHRIIHQVH7KHUDFLDOGLVSDULWLHVLGHQWLILHGE\%DVVLQ
WKHGHDWKSHQDOW\FKDUJLQJSKDVHGRQRWRFFXULQDQ\QRQ
GHDWKHOLJLEOHIHGHUDORIIHQVHV7KHUHIRUHWKH\VXJJHVWWKDW
DGHIHQGDQW¶VUDFHGRHVSOD\DUROHGXULQJWKHGHDWKSHQDOW\
SURWRFRO7KH'HSDUWPHQWRI-XVWLFH¶VRIILFLDOV¶FRPPHQWV
EHDUWKLVRXW$V%DVVVWDWHVLQKLVEULHI³>W@KHSUHFLVHSRLQW
PDGH E\ WKH $WWRUQH\V *HQHUDO DQG WKH IRUPHU 'HSXW\
$WWRUQH\*HQHUDOLVWKDWWKH\DUHGHHSO\WURXEOHGEHFDXVHUDFH
PD\EHV\VWHPLFDOO\ELDVLQJIHGHUDOFDSLWDOFKDUJLQJDQGWKDW
WKH\ QHHG PRUH LQIRUPDWLRQ WR NQRZ IRU VXUH´ HPSKDVLV
DGGHG ,IWKH'HSDUWPHQWRI-XVWLFH¶VRIILFLDOSRVLWLRQLVWKDW
WKHVHVWDWLVWLFVVWDQGLQJDORQHVKRZVXIILFLHQWHYLGHQFHRI
WKHSRVVLELOLW\RIUDFLDODQLPXVWRZDUUDQWIXUWKHUVWXG\ZH
FDQQRWIDLUO\GHQ\%DVVWKHVDPHRSSRUWXQLW\WRLQYHVWLJDWH
ZKHQKHKDVLQWURGXFHGQRWRQO\WKH6XUYH\EXWVHYHUDORWKHU

-- 6 of 8 --

8QLWHG6WDWHVY%DVV 1R
%'LVFULPLQDWRU\(IIHFW
%DVV¶VHYLGHQFHVKRZVWKHVDPHW\SHRIVWDWLVWLFDOGLVSDULW\
WKH6XSUHPH&RXUWSUHYLRXVO\DSSURYHGRILQERWK+XQWHUDQG
$UPVWURQJ DV ³LQGLVSXWDEOH HYLGHQFH´ RI D ODZ¶V
GLVFULPLQDWRU\HIIHFW)RUH[DPSOHWKHHYLGHQFHVKRZVWKDW
DOWKRXJKZKLWHVPDNHXSWKHPDMRULW\RIDOOIHGHUDOSULVRQHUV
WKH\DUHRQO\RQHILIWKRIWKRVHFKDUJHGE\WKH8QLWHG6WDWHV
ZLWK GHDWKHOLJLEOH RIIHQVHV 7KH 8QLWHG 6WDWHV FKDUJHV
EODFNVZLWKDGHDWKHOLJLEOHRIIHQVHPRUHWKDQWZLFHDVRIWHQ
DVLWFKDUJHVZKLWHV&I$UPVWURQJ86DW FLWLQJ
HYLGHQFHLQ +XQWHUDVH[DPSOHRI W\SHRISURRIQHHGHGWR
REWDLQGLVFRYHU\LQVHOHFWLYHSURVHFXWLRQFODLP +XQWHU
86DW FLWLQJVLQJOHVWDWLVWLFVKRZLQJEODFNVDWOHDVW
WLPHVDVOLNHO\DVZKLWHVWRKDYHFKDOOHQJHGVWDWHODZDSSOLHG
WRWKHP ,QDGGLWLRQWKH8QLWHG6WDWHVFKDUJHVEODFNVZLWK
UDFNHWHHULQJ PXUGHU RQHDQGDKDOI WLPHV DV RIWHQ DV LW
FKDUJHV ZKLWHV DQG ZLWK ILUHDUPV PXUGHU %DVV¶V FKDUJH
PRUHWKDQWZLFHDVRIWHQDVLWFKDUJHVEODFNV$PRQJGHDWK
SHQDOW\ GHIHQGDQWV WKH 8QLWHG 6WDWHV HQWHUV SOHD EDUJDLQV
ZLWK ZKLWHV DOPRVW WZLFH DV RIWHQ DV LW GRHV ZLWK EODFNV
8QGHUWKH³WLPHV´VWDQGDUGDSSURYHGRILQ$UPVWURQJ
WKHQ WKH VWDWLVWLFV SUHVHQWHG E\ %DVV FRQVWLWXWH VXIILFLHQW
HYLGHQFH RI D GLVFULPLQDWRU\ HIIHFW WR ZDUUDQW IXUWKHU
GLVFRYHU\DVDPDWWHURIODZ
7KH 8QLWHG 6WDWHV FRQFHGHV WKDW WKH 6XUYH\ VKRZV D
VWDWLVWLFDO GLVSDULW\ DW WKH FKDUJLQJ VWDJH EXW DUJXHV WKDW
%DVV¶V HYLGHQFH GRHV QRW VDWLVI\ WKH ³VLPLODUO\ VLWXDWHG´
UHTXLUHPHQW EHFDXVH %DVV KDV IDLOHG WR LGHQWLI\ ZKLWH
GHIHQGDQWVZKRFRXOGKDYHEHHQFKDUJHGZLWKGHDWKHOLJLEOH
FULPHVEXWZHUHQRW:HILQGKRZHYHUWKDWZLWKWKHSOHD
EDUJDLQLQJVWDWLVWLFV%DVVKDVLGHQWLILHGDSRRORIVLPLODUO\
VLWXDWHGGHIHQGDQWV±WKRVHZKRVHFULPHVVKDUHGVXIILFLHQW
DJJUDYDWLQJIDFWRUVWKDWWKH8QLWHG6WDWHVFKRVHWRSXUVXHWKH
GHDWKSHQDOW\DJDLQVWHDFKRIWKHP2IWKRVHGHIHQGDQWVWKH
8QLWHG6WDWHVHQWHUVSOHDEDUJDLQVZLWKRQHLQWZRZKLWHVLW
HQWHUVSOHDEDUJDLQVZLWKRQHLQIRXUEODFNV7KHUHIRUHWKH
8QLWHG 6WDWHV¶V DVVHUWLRQ WKDW %DVV KDV IDLOHG WR VKRZ D
1R 8QLWHG6WDWHVY%DVV
HVWDEOLVKGLVFULPLQDWRU\LQWHQWDGHIHQGDQWPXVWVKRZWKDW
WKHSURVHFXWRULDOSROLF\³ZDVPRWLYDWHGE\UDFLDODQLPXV´
-RQHV)GDW
$%DVV¶V(YLGHQFH
7KURXJK WKH 'HSDUWPHQW RI -XVWLFH¶V 6XUYH\ DQG RWKHU
VWDWLVWLFDOHYLGHQFH%DVVSUHVHQWHGWKHIROORZLQJHYLGHQFH
WHQGLQJ WR VKRZ WKDW VHOHFWLYH SURVHFXWLRQ WDLQWV WKH GHDWK
SHQDOW\ SURWRFRO )LUVW WKH 6XUYH\ VKRZHG D VLJQLILFDQW
GLIIHUHQFH EHWZHHQ WKH SHUFHQWDJH RI ZKLWH DQG EODFN
SULVRQHUV LQ WKH JHQHUDO IHGHUDO SULVRQ SRSXODWLRQ ZKLWH
ILIW\VHYHQ SHUFHQW EODFN WKLUW\HLJKW SHUFHQW DQG WKRVH
FKDUJHG E\ WKH 8QLWHG 6WDWHV ZLWK GHDWKHOLJLEOH FULPHV
ZKLWHWZHQW\SHUFHQWEODFNIRUW\HLJKWSHUFHQW 2IWKH
VHYHQWHHQGHIHQGDQWVFKDUJHGZLWKDGHDWKHOLJLEOHFULPHLQ
WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ QRQH ZHUH ZKLWH DQG
IRXUWHHQZHUHEODFN WKHRWKHUWKUHHZHUH+LVSDQLF
6HFRQGWKH6XUYH\VKRZHGWKDWWKH8QLWHG6WDWHVHQWHUHG
LQWR D SOHD EDUJDLQ ZLWK IRUW\HLJKW SHUFHQW RI WKH ZKLWH
GHIHQGDQWV DJDLQVW ZKRP LW VRXJKW WKH GHDWK SHQDOW\
FRPSDUHGZLWKWZHQW\ILYHSHUFHQWRIVLPLODUO\VLWXDWHGEODFN
GHIHQGDQWV7KH8QLWHG6WDWHVHQWHUHGLQWRSOHDDJUHHPHQWV
ZLWK WZHQW\HLJKW SHUFHQW RI +LVSDQLFV DQG WZHQW\ILYH
SHUFHQWRIRWKHUQRQZKLWHGHIHQGDQWV
7KLUG WKH 6XUYH\ VKRZHG WKDW WZR RI WKH WKUHH GHDWK
HOLJLEOHRIIHQVHVFKDUJHGPRVWIUHTXHQWO\DJDLQVWZKLWHVDQG
EODFNV ZHUH WKH VDPH EXW WKDW WKH SHUFHQWDJHV E\ UDFH RI
WKRVHFKDUJHGZLWKHDFKFULPHZHUHYDVWO\GLIIHUHQW6L[WHHQ
SHUFHQWRIGHDWKHOLJLEOHZKLWHVZHUHFKDUJHGZLWKILUHDUPV
PXUGHUFRPSDUHGZLWKWKLUW\WZRSHUFHQWRIGHDWKHOLJLEOH
EODFNV)LIWHHQSHUFHQWRIGHDWKHOLJLEOHZKLWHVZHUHFKDUJHG
ZLWKUDFNHWHHULQJPXUGHUFRPSDUHGZLWKWZHQW\WZRSHUFHQW
RI GHDWKHOLJLEOH EODFNV 7KH 6XUYH\ QRWHG WKDW ILUHDUPV
PXUGHU UDFNHWHHULQJ PXUGHU DQG FRQWLQXLQJ FULPLQDO
HQWHUSULVHPXUGHU WKHWKUHHFKDUJHVEURXJKWPRVWIUHTXHQWO\
DJDLQVWGHDWKHOLJLEOHEODFNV ³FDQEHFKDUJHGLQDZLGHDUUD\
RI FLUFXPVWDQFHV DQG >DUH@ WKHUHIRUH PRUH OLNHO\ WR EH
DYDLODEOH DV D FKDUJLQJ RSWLRQ LQ D JLYHQ FDVH WKDQ PRUH

-- 7 of 8 --

8QLWHG6WDWHVY%DVV 1R
QDUURZO\GHILQHGRIIHQVHVVXFKDVNLGQDSLQJUHODWHGPXUGHU´
+RZHYHUGHDWKHOLJLEOHZKLWHVZHUHPRVWRIWHQFKDUJHGZLWK
PXUGHUZLWKLQDIHGHUDOMXULVGLFWLRQ WZHQW\RQHSHUFHQWRIDOO
GHDWKHOLJLEOHZKLWHV
%DVVDOVRLQWURGXFHGRWKHUVWDWLVWLFVLQGLFDWLQJWKDWEODFNV
DUHQRPRUHOLNHO\WRFRPPLWYLROHQWIHGHUDORIIHQVHVWKDQ
ZKLWHV )RU LQVWDQFH WKH 8QLWHG 6WDWHV 6HQWHQFLQJ
&RPPLVVLRQ¶VVWDWLVWLFVIRU WKHPRVWUHFHQWVWDWLVWLFV
FXUUHQWO\DYDLODEOH VKRZWKDWWZHQW\HLJKWSHUFHQWRISHRSOH
VHQWHQFHG IRU IHGHUDO PXUGHU ZHUH ZKLWH ZKLOH HLJKWHHQ
SHUFHQW ZHUH EODFN 6HH 6RXUFHERRN RI )HGHUDO
6HQWHQFLQJ6WDWLVWLFV,QIDFWWKHUHZHUHRQO\IRXUIHGHUDO
RIIHQVHFDWHJRULHVZKHUHZKLWHVFRPSULVHGWZHQW\SHUFHQWRU
OHVVRIWKHWRWDOGHIHQGDQWVVHQWHQFHG7KH&RPPLVVLRQ¶V
VHQWHQFLQJVWDWLVWLFVUHIOHFWWKUHHRIWKHPPDQVODXJKWHU
ZKLWHVVHYHQWHHQSHUFHQWEODFNVHOHYHQSHUFHQW VH[XDO
DEXVH ZKLWHVHLJKWHHQSHUFHQWEODFNVVHYHQSHUFHQW DQG
LPPLJUDWLRQ ZKLWHVIRXUSHUFHQWEODFNVIRXUSHUFHQW 7KH
6XUYH\UHIOHFWVWKHIRXUWKGHDWKHOLJLEOHGHIHQGDQWV ZKLWHV
WZHQW\SHUFHQWEODFNVIRUW\HLJKWSHUFHQW ,QFRQWUDVWWKH
RQO\IHGHUDORIIHQVHUHIOHFWHGLQWKHVHQWHQFLQJVWDWLVWLFV
ZKHUHEODFNVUHSUHVHQWHGIRUW\HLJKWSHUFHQWRUPRUHRIWKH
WRWDOGHIHQGDQWVVHQWHQFHGZDVUREEHU\ EODFNVIRUW\HLJKW
SHUFHQWZKLWHVIRUW\RQHSHUFHQW ,QWKHIHZQRQGHDWK
HOLJLEOH RIIHQVH FDWHJRULHV LQ ZKLFK EODFNV DFWXDOO\
FRQVWLWXWHGDKLJKHUSHUFHQWDJHRIWRWDORIIHQGHUVVHQWHQFHG
WKDQ ZKLWHV QRQH UHIOHFWHG D VWDWLVWLFDO UDFLDO GLVSDULW\
FRPSDUDEOHWRWKHGLVSDULW\UHIOHFWHGE\WKH6XUYH\IRUGHDWK
HOLJLEOHFKDUJHV
,Q DGGLWLRQ WR WKH VWDWLVWLFDO HYLGHQFH %DVV LQWURGXFHG
SXEOLFFRPPHQWVPDGHRQWKH6XUYH\¶VUHOHDVHGDWHE\WKHQ
$WWRUQH\*HQHUDO5HQRDQGWKHQ'HSXW\ $WWRUQH\*HQHUDO
+ROGHU ZKR H[SUHVVHG FRQFHUQ RYHU WKH VLJQLILFDQW UDFLDO
GLVSDULWLHVXQFRYHUHG E\WKH6XUYH\)RULQVWDQFH+ROGHU
FRPPHQWHG
, FDQ¶W KHOS EXW EH ERWK SHUVRQDOO\ DQG SURIHVVLRQDOO\
GLVWXUEHGE\WKHQXPEHUVWKDWZHGLVFXVVWRGD\7REH
1R 8QLWHG6WDWHVY%DVV
'XULQJ KLV FRQILUPDWLRQ KHDULQJV -RKQ $VKFURIW H[SUHVVHG VLPLODU
FRQFHUQ RYHU WKH 6XUYH\¶V UHVXOWV VWDWLQJ WKDW WKH HYLGHQFH RI UDFLDO
GLVSDULW\ LQ WKH IHGHUDO GHDWK SHQDOW\ ³WURXEOHG >KLP@ GHHSO\´
VXUH PDQ\ IDFWRUV KDYH OHG WR WKH GLVSURSRUWLRQDWH
UHSUHVHQWDWLRQRIUDFLDODQGHWKQLFPLQRULWLHVWKURXJKRXW
WKHIHGHUDOGHDWKSHQDOW\SURFHVV1HYHUWKHOHVVQRRQH
UHDGLQJWKLVUHSRUWFDQKHOSEXWEHGLVWXUEHGWURXEOHGE\
WKLVGLVSDULW\
,QUHVSRQVHWRDQRWKHUTXHVWLRQ+ROGHUWDFLWO\UHFRJQL]HGWKDW
WKH6XUYH\¶VUHVXOWVLPSOLFDWHWKHYHU\FRQFHUQVIRUPLQJWKH
EDVLVRI%DVV¶VVHOHFWLYHSURVHFXWLRQFODLP³,¶PSDUWLFXODUO\
VWUXFNE\WKHIDFWVWKDW$IULFDQ$PHULFDQVDQG+LVSDQLFVDUH
RYHUUHSUHVHQWHGLQWKRVHFDVHVSUHVHQWHGIRUFRQVLGHUDWLRQ
RIWKHGHDWKSHQDOW\DQGWKRVHFDVHVZKHUHWKHGHIHQGDQWLV
DFWXDOO\VHQWHQFHGWRGHDWK´ HPSKDVLVDGGHG 5HQRDOVR
H[SUHVVHG FRQFHUQ RYHU WKH 6XUYH\¶V UHVXOWV HYHQ ZKLOH
DFNQRZOHGJLQJWKHYDULRXVQRQUDFLDOIDFWRUVWKDWFRXOGDIIHFW
WKHP³6RLQVRPHUHVSHFWV,¶PQRWVXUSULVHG>E\WKHUDFLDO
GLVSDULWLHV@ EXW , FRQWLQXH WR EH VRUHO\ WURXEOHG´ :KLOH
FDXWLRQLQJ WKDW LQWHQWLRQDO UDFLDO ELDV FRXOG QRW IDLUO\ EH
LQIHUUHGVLPSO\DVDUHVXOWRIWKHQXPEHUV5HQRHPSKDWLFDOO\
HQGRUVHGIXWXUHVWXGLHVWRGHWHUPLQHZKHWKHUWKHGLVSDULWLHV
ZHUHVKDSHGLQSDUWE\UDFLDODQLPXV³0RUHLQIRUPDWLRQLV
QHHGHGWREHWWHUXQGHUVWDQGWKHPDQ\IDFWRUVWKDWDIIHFWKRZ
KRPLFLGHFDVHVPDNHWKHLUZD\LQWRWKHIHGHUDOV\VWHPDQG
RQFHLQWKHIHGHUDOV\VWHPZK\WKH\IROORZGLIIHUHQWSDWKV
$QHYHQEURDGHUDQDO\VLVPXVWWKHUHIRUHEHXQGHUWDNHQWR
GHWHUPLQH LI ELDV GRHV LQ IDFW SOD\ DQ\ UROH LQ WKH IHGHUDO
GHDWKSHQDOW\V\VWHP´ HPSKDVLVDGGHG 7KHUHIRUHWKHWRS
'HSDUWPHQWRI-XVWLFHRIILFLDOVKDYHWDNHQWKHSRVLWLRQWKDW
DOWKRXJK WKH 6XUYH\¶V UHVXOWV GR QRW FRQFOXVLYHO\ VKRZ
LQWHQWLRQDOUDFLDOELDVQHLWKHUGRWKH\FRQFOXVLYHO\VKRZWKH
ODFNRIELDV5DWKHULQ5HQR¶VDQG+ROGHU¶VYLHZWKHUHVXOWV
GHPRQVWUDWH D FOHDU UDFLDO GLVSDULW\ DQG UDLVH TXHVWLRQV
ZDUUDQWLQJIXUWKHUVWXG\WRGHWHUPLQHZKHWKHUWKDWGLVSDULW\
LVFDXVHGE\LQWHQWLRQDOUDFLDOGLVFULPLQDWLRQ

-- 8 of 8 --